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Discussion Question $5-7($L$0.2)$

Wes was a major league baseball pitcher who earned $$10,000,000$ for his $20$ wins this year. Sam was also a major league baseball pitcher before a career$-$ending injury caused by a negligent driver. Sam sued the driver and collected $$6,000,000$ as compensation for lost estimated future income as a pitcher and $$4,000,000$ as punitive damages.

a$.$ Do the amounts that Wes and Sam receive have the same effect on their gross income?

b$.$ Enter the amount, if any, to be included in the gross income for Wes and Sam.

Wes:

$

Sam:

$$

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The legal theory of personal injury damages is that the amount received is intended $"$to make the plaintiff $[$the injured party$]$ whole as before the injury." A taxpayer may seek recovery for $(1)$ a loss of income, $(2)$ expenses incurred, $(3)$ property destroyed, or $(4)$ personal injury.

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